Gold rallied as the biggest three- day drop since the failure of Lehman Brothers Holdings Inc. in 2008 encouraged purchases by investors seeking a store of value amid market turmoil. Silver also advanced. Immediate-delivery gold gained for the first day in five, climbing as much as 0.9 percent to $1,641.40 an ounce and trading at $1,640.75 at 10:41 a.m. in Singapore. The price had lost 8.8 percent in the previous three days as some investors sold the metal to cover losses in other markets, which plunged on concern that the global economy may lapse into recession. The European Central Bank is likely to debate next week restarting covered-bond purchases and may discuss interest-rate cuts to ease funding strains, a euro-region central bank official said. Policy makers are under pressure to halt the European debt crisis that has Greece on the brink of default. “The facts haven’t changed,” said Gijsbert Groenewegen, a partner at Silver Arrow Capital Management. “They’re just postponing what will happen in three months or six months or whatever, but we will get default.” December-delivery bullion rose as much as 2.7 percent to $1,638.40 an ounce in New York before trading at $1,634.60. Futures tumbled 11.8 percent in the last three days, the largest drop in 28 years, prompting CME Group Inc. to increase the margin requirements on gold and silver trading. ‘Panicky’ Market “When the market gets very panicky, they sell everything off and they go for cash and Treasuries because that’s really the largest market where you can park your money,” Groenewegen said in a Bloomberg Television interview. “It’s a great opportunity to accumulate more gold and silver.” Cash silver gained as much as 2 percent to $31.355 an ounce, after tumbling 22.5 percent in the past three days, touching a 10-month low of $26.07 yesterday. December-delivery silver rose as much as 5 percent to $31.475 an ounce. “Silver has taken such a hit on the downside is because silver is also an industrial metal,” said Groenewegen. “On the way down it acts as an industrial metal, on the way up it’s a precious metal. You see much more volatility also because the silver market is less deep than the gold market.” CME raised the minimum cash deposit for gold futures by 21 percent to $11,475 per 100-ounce contract at the close of trading yesterday, while the minimum cash deposit for silver was raised by 15.6 percent to $24,975, it said on Sept. 23. Spot platinum was little changed at $1,560.57 an ounce after falling as much as 0.7 percent to $1,549.05. Palladium was also little changed at $631.25 an ounce. To contact the reporter for this story: Glenys Sim in Singapore at gsim4@bloomberg.net To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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